Pressure growing on Albania's central bank governor

By bne IntelliNewsAugust 12, 2014

Clare Nuttall in Bucharest -

Pressure is building on the governor of the Bank of Albania following revelations that theft at the central bank has drained it of ALL715m (€5m) in cash. Members of the governing coalition have now joined the opposition and protestors in efforts to force Ardian Fullani from his post.

The scandal originally broke on July 30, when Albanian police announced that seven members of staff at the central bank had been detained on suspicion of theft. Further arrests have followed, only encouraging the calls for Fullani's head. At a session on August 11, the chairman of the parliamentary security commission, Spartak Braho, called for several senior central bank officials to resign, according to Albanian news site Albeu.

"They have moral, political and institutional responsibility," said Braho, a member of the Socialist Movement for Integration (SMI), one of Prime Minister Edi Rama’s Socialist Party’s junior coalition partners. "As for legal responsibility, other[s] will decide it.”

That demand came shortly after another coalition partner - Spartak Ngjela of the Law and Justice party - said in an interview that he believed the uncovered thefts are “just the tip of the iceberg”. He demanded that the government request an international audit of the bank.

The thefts sparked a series of demonstrations, with a crowd of several hundred gathering outside the central bank on August 4 calling for Fullani - who has headed the central bank for around a decade - to be sacked immediately. Further protests took place on August 9, both in Tirana and Shkodra in the north of the country. Residents of Albania’s fourth largest city, Elbasan, have prepared a petition demanding the governor goes.

The continuing protest and criticism is now clearly putting pressure on Rama via his coalition partners, and demonstrates that the scandal is not going to quietly subside. The PM has so far resisted demands for the long-standing governor's head.

However, the Socialist Party wielded promises to deal with the key areas of crime and corruption to help oust the previous centre-right government at elections in June 2013. On top of that, Tirana needs to be seen to be cleaning up the country in order to maintain progress towards EU accession - the priority strategy. Therefore, Rama can barely risk taking a soft stance on the central bank scandal, but he has yet to act.

Gamble

The thefts, which were carried out over several years, were discovered during an audit which found at least ALL713m missing. One of the suspects, Ardian Bitraj, confessed shortly after his arrest. Bitraj said that he had used most of the money to gamble on sporting events. He stepped up the thefts during the 2014 World Cup, taking notes home from the bank daily.

A bank official told Reuters that Bitraj took new notes from the bank’s storeroom and replaced them with old books, smuggling the notes out of the building under his clothes. "I went back into the storeroom under the pretext I had forgotten my phone or the car keys and took money from the stock," Bitraj told prosecutors, the newswire reported.

Overall, ten people are being held by police while the investigation is carried out. Prosecutors say they plan to question around 70, including members of the central bank’s supervisory board, other employees, and family members of those arrested. Bank transfers by both the suspects and other bank employees are being tracked in an attempt to locate the missing funds.

The Bank of Albania said on August 6 it has set up three working groups to carry out a complete inventory of banknotes, check for leaks of secret information and to find out whether employees dealing with cash followed the bank’s rules. However, the central bank insists that although rules for banknote storage were broken, its regulatory procedures were not at fault.

“The correct implementation of the framework that regulates the procedures, organisational structure, electronic and IT systems at the Bank of Albania would have prevented the event and enabled its timely detection,” says the statement from the bank’s supervisory board.

In an August 8 statement, the Bank of Albania said that a special meeting had been held with employees, who were “urged... to sharpen their sense of professional scepticism and enhance cooperation in order to rigorously implement the legal and regulatory framework in force."

Although Albania’s economy has grown rapidly in recent years, poverty - especially in rural areas - remains a serious problem. In June, Albania gained EU candidate status, though EU foreign minister said that Tirana will have to step up its efforts to tackle organised crime and corruption before joining the bloc. Albania continues to perform poorly in international assessments of crime and corruption; it is the lowest-ranked European country on Transparency International’s Corruption Perception index, dropping to 116th place among 177 countries in 2013, which puts it on a par with Nepal and Vietnam.

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